Posted By Global Banking and Finance Review
Posted on March 12, 2025
By Andrea Mandala
MILAN (Reuters) -Italy's Banca Popolare di Sondrio on Wednesday vowed to double payouts to investors through 2027 and set ambitious profit goals as it strives to fend off a takeover offer from bigger rival BPER Banca.
Joining a raft of takeover bids rocking Italy's financial sector, BPER last month unveiled a 4.3 billion euro ($4.7 billion) all-share offer for Pop Sondrio.
Headquartered in the Valtellina valley, a wealthy mountain area north east of Milan, Pop Sondrio has strong local roots which it has fought to preserve.
It challenged in court a government reform that stripped it of the mutual bank status that prevented takeovers, and was the last large 'popolare' bank in Italy to comply with the reform.
"Our new strategic plan is in line with our history, for 150 years we've been an independent bank," CEO Mario Alberto Pedranzini said.
Pedranzini has enlisted the help of Bank of America and Morgan Stanley as defence advisers against BPER.
A tie-up would bring together two banks whose main shareholder is Unipol, Italy's second-largest insurer which owns nearly 20% of each lender.
Unipol boss Carlo Cimbri had ruled out in the past pushing for a combination saying the two banks had a very different culture, but BPER said it had been forced to act as a defensive move given the consolidation wave.
To convince shareholders they are better off without BPER, Pop Sondrio said it would return them 1.5 billion euros in the 2025-2027 period, doubling the payout of the past three years.
That entails distributing 85% of profits each year, up from 63% in 2024.
The bank is targeting a 2027 profit of 583 million euros, which would match the record result of 2024, despite the ongoing decline in interest rates eating into lending margins.
Some 100 million euros of the 2025 net profit are forecast to come from finalising the sale of a stake in its retailers' payments business to Nexi, Pop Sondrio said.
Jefferies analysts said the 2027 profit goal was 20% higher than expected thanks to lower cost and bad loan charges.
Shares rose 2.5% by 0900 GMT, against a 2.2% rise in Italy's banking index. ($1 = 0.9181 euros)
(Editing by Valentina Za and Keith Weir)